The IT giant will deal with silicon photonics - how it will affect the network equipment market

    At the end of the year, Cisco announced its intention to acquire Luxtera, which creates electron-optical chips. Let's see how this deal will change the data center network infrastructure. / Flickr / Alexandre Delbos / CC BY

    Why is it Cisco

    Founded in 2001, Luxtera has been developing silicon photonics for data centers. The company manufactures devices that act as an interface between a fiber optic cable and a silicon chip. They allow you to connect fiber directly to the server, accelerating data transfer in data centers and reducing equipment costs. In this case, there is no need to install separate receivers , or transceivers, for converting an optical signal into an electric one.

    Cisco decided to acquire Luxtera in order to integrate its devices into its data center equipment. This will help the IT giant handle the processing of growing traffic volumes. According to the company , by 2022, global IP traffic will triple compared to 2017 and will reach 4.8 zettabytes per year. The IT giant plans to implement optical chips in 100GbE and 400GbE Ethernet systems.

    The deal will cost Cisco $ 660 million and will be closed in the third quarter of fiscal 2019. After that, Luxtera employees will join the Cisco Networking and Security Division.

    How are Luxtera chips arranged?

    In Luxtera devices, above the silicon wafer of the processor, there are elements for converting an optical signal into an electrical signal and vice versa. Optical fiber is connected directly to the chip.

    The data transmitted by the computer is encoded by a special laser. Its beam passes through an optical modulator , which changes the amplitude or frequency of the light wave. Then the light enters the amplifier to seal the signal and passes into the fiber optic cable. When receiving data, light from optical fiber is captured by germanium photodetectors. Germanium is close in properties and structure to silicon, but has greater productivity. Then the electrical signal generated by the detectors is amplified and fed to the server for processing.

    According to the developers, the chip allows you to transfer data via fiber optic cable directly to servers at a speed of 100 Gb / s.

    Transaction Opinions

    The deal is considered timely for Cisco and said that it will help the company strengthen its market position. According to analysts at Bloomberg, data centers are increasingly moving from proprietary systems to cheaper white-box equipment. This has led to the fact that the growth of revenue of the IT giant in the market for network systems has slowed.

    New chips will be the way out of this situation. They will increase the performance of Cisco equipment for data centers and at the same time lower their prices, which will attract more customers for the corporation. At the same time, Cisco will have its own automated production of network equipment. This will make the company independent of third-party suppliers.

    The combination of Cisco and Luxtera will affect not only the future of companies, but also the IT industry as a whole. According to semiconductor market researchers, the IT giant’s interest in silicon photonics confirms that the technology has potential.

    / Flickr / Groman123 / CC BY-SA

    So far, silicon photonics can not be called a universal solution, which will soon be transferred to all companies. Its implementation requires high costs for the development and technical re-equipment of existing data centers. But Cisco’s efforts will help make the technology cheaper and begin promoting it in the mass markets of data center equipment.

    Who else is investing in silicon photonics

    Cisco is not the first company interested in developing silicon photonics-based products. So, in August 2016, telecommunications equipment manufacturer Juniper acquired Aurrion. In 2019, Juniper should present the first results of collaboration. A whole line of products for 400GbE networks is being prepared.

    Other IT giants are also developing silicon photonics. In 2016, Intel began manufacturing shipments of optical chips. At first, the chips were used to transfer data between servers and remote data centers. Last year, Intel representatives announced that the company plans to use silicon photonics outside the data center: in the lidars of unmanned vehicles.

    For the development of electron-optical chips, the company is ready to acquire other technological organizations and startups. By the way, Intel, like Cisco, also considered the purchase of Luxtera. Semiconductor maker Broadcom was ready to make the deal. He recently released a PHY chip that is compatible with electron-optical chips. Probably, the Singapore company also plans to actively develop this area.

    according to the assessmentHSE, by 2024, the total market for silicon photonics solutions for data centers will reach $ 410 million with an average annual growth rate of 40%. Supporting the industry by large IT companies will help popularize technology. This will prepare the infrastructure of data centers for network loads, which will increase with the further development of cloud services and the Internet of things.

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